Bitcoin Prices Drop After China Said To Order Banks To Close Accounts

Bitcoin prices declined by about 10% to 14% or around $70 after China was said to have ordered the closure of more than ten exchanges’ trading accounts. According to Bloomberg, those accounts must be closed down by April 15. That means bitcoin investors won’t be able to transfer funds over to the bitcoin exchanges. However, the report may not actually be true, so exchanges are scrambling to figure out what to do if it is true.

Currently it’s just a rumor

At this point, the report cannot be verified, so some bitcoin traders have speculated on forums that this report is a false one aimed at dragging down the price of the digital currency, according to The Wall Street Journal. At BTC China, bitcoin prices declined as much as 14.1% today, and the exchange’s CEO told the newspaper that he had not seen the document which told them that banks would have to close their accounts.

However, he remains concerned that this report is true. He said if it does turn out to be true, then customers of BTC China wouldn’t be able to deposit funds with the exchange using their bank accounts.

What might happen to bitcoins in China?

He said it’s too early for them to say what they might do if the rumor is true. However, he said one suggestion would be for customers to use cash when making direct deposits with the exchange. The executive also said that under the practices of China’s central bank, that information about the bank accounts might never be officially announced. However, he said regulators could enforce it through direct channels.

Chinese news outlet Caijing said Huobi and BTC Trade, two Chinese exchanges which compete with BTC China, did not receive any notification from the People’s Bank of China. In December, the value of the digital currency plummeted from its all-time high of more than $1,000 after the PBOC informed banks that they would not be allowed to take part in the bitcoin business.

BTC China stopped taking deposits at that time just as a precaution, but then it restored the capability quietly after lawyers decided that the ruling in December was meant only to keep banks from taking part in speculations about the digital currency directly.